A marked contrast in capacity
PSG appears poised for deal-making while HCI has always held significant debt and this may limit its options
With the local equity market in turmoil and professional punters starting to run scared, one might think a perfect play is unfolding for opportunistic and adventurous investment counters like Hosken Consolidated Investments (HCI) and PSG Group.
HCI and PSG recently engaged investors, the former at a well-attended AGM and the latter during an investment presentation covering interim results.
If vendor price expectations have been shaken down by the prevailing market ructions, neither PSG or HCI are making a big fuss about new opportunities. These days it might be better not to raise shareholder expectations for moving and shaking.
Still, the capacity for dealmaking in the two entities stands in stark contrast.
PSG, which has long had a perpetual preference share structure in place, appears powerfully poised for dealmaking with its gearing a mere 13%. Interest cover is a reassuring five times.
Perhaps more importantly, PSG’S brains trust has been able to tap the market for fresh funding via shares-for-cash issues during those euphoric moments that the group’s